When to Sell a Stock or Position: The Backtested QS Exit Strategy Analysis

When should you sell a stock or position? Many articles and videos deal with when to buy, but less focus is on when to sell. When should you sell? What method should you use to sell? What is the best time to sell a position? How long should you wait until you sell? Let’s look at a straightforward but effective trading rule for when to sell a stock or position.

The best trading rule for when to sell a stock or position is the QS exit: when today’s Close is higher than yesterday’s High.

It’s such an easy sell condition, yet it works very well, and perfectly so, for mean reversion strategies.

We have named it the QS exit (after Quantified Strategies) because we were the first to use this simple but effective sell signal. We have used it for our own trading for over two decades!

Exit trading strategies (when to sell)

Here’s a list of all the exit trading strategies we have covered:

When To Sell A Stock Or Position? (The Backtested QS Exit)

Before we start: If you are looking for profitable short term trading strategies, you might want to check out that clickable link. We have written over 1 000 articles that contain strategy backtests since we started in 2012.

Let’s look into more detail about the sell rule and why it’s so effective:

Back in 2002, we first started using our best exit for stocks and stock indexes:

When today’s close is higher than yesterday’s high.

Let’s explain:

Today’s Close is the last print of the official trading day, and the High is the highest traded price. In a candlestick chart, it looks like this: